*NEWS*EPSON PROFITS DOWN 73%

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*NEWS*EPSON PROFITS DOWN 73%

 user 2005-10-28 at 9:54:00 am Views: 51
  • #14409

    Price War Hurts Epson Inkjet Revenues
    Epson Profit Down 73%
    Seiko Epson has suffered a huge drop in net profit with second quarter profit falling an astonishing 73 per cent.
    Reporting
    First Half results the company fell victim to significant declines in
    average selling prices for both inkjet printers and display.
    Reporting
    a Net Loss of ¥1.16 billion for the first half to September 30 the
    company claimed it was forced to drop inkjet printer prices in the US
    by more than 10 per cent as it faced price competition from Hewlett
    Packard. HP and Epson are the number one and two printer vendors world
    wide (respectively). However, the market is moving rapidly to Colour
    Laser technologies which have a higher profit margin.
    The second
    quarter results were the worst for Epson with net income falling to
    just ¥5.8B down from ¥21.9B in the year ago quarter. This occurred
    despite sales rising by 8.4 percent to ¥380B.
    Seiko Epson is not
    just suffering in the inkjet space, price declines in the LCD market
    (Seiko sells LCDs used in mobile phones) have also suffered. The
    relevant division reported an operating loss of ¥3.0B compared to a
    ¥37.1B profit a year ago.
    Also the LCD panels used in rear
    projection TVs and projector units failed to save the company, which
    said demand for these products in the US fell well below expectations.

           
    Seiko Epson “equal weight”
    LONDON,
    October  – Analysts at Morgan Stanley maintain their “equal weight”
    rating on Seiko Epson Corp. The target price is set to ¥2600.
    In a
    research note published this morning, the analysts mention that the
    company has posted its 1H05 results in-line with expectations. Seiko
    Epson expects the information-related segment to drive its profits in
    H2 on account of growth in the consumables segment in Europe and the
    introduction of new inkjet printers. The analysts says, however, that
    the information-related segment is likely to post its results short of
    the guidance in H2 due to limited demand for ink cartridge replacement
    and a decline in the company’s market share and prices in Europe.